SIMPLE IRA vs. 401(k)

The 401(k) Benefit

Should my business owner client convert their SIMPLE IRA?

Small business owners just starting off often set up a SIMPLE IRA to save for retirement. As the business grows and the owners reach their contribution limit many outgrow their SIMPLE IRA and need a better savings vehicle.

Here is how a 401(k) can better serve your business owner clients:

SIMPLE IRA	401(k) Profit Sharing	The 401(k) Benefit
$19,500 contribution limit (includes catch-up)	$76,500 contribution limit (includes catch-up)	$57,000 more in savings
Profit Sharing not permitted	Profit Sharing available	Able to tailor contributions to specific groups
Mandatory contributions to the employees’ accounts	The option to make contributions to the employees’ accounts	Receive up to a $1,000 tax credit per employee contribution*
No vesting schedule	Vesting schedule available	Provides incentive compensation that encourages retention
Individual plan for each participant	One group plan for all participants	Save time with group meetings for plan enrollment and education

At Trinity, we make complex pension concepts simple, and our seamless conversion process creates a smooth transition. Every client has access to a dedicated Relationship Management team who is available to answer questions and make sure that the plan remains compliant.

Plus, our Trinity Pro and 3(16) Services offers the convenience and protection your business owner clients want. With Trinity, every client’s plan is tailored to truly fit their business needs and goals from service to plan design.

For more information about our retirement plan services, visit Trinity's 3.16 Services, Trinity Pro, and our Relationship Management Team page.

09 Jul 2024

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Trinity Pension Consultants